Resource title

Household Labor Supply Effects of Low-Wage Subsidies in Germany

Resource image

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Resource description

This research evaluates the impact on German household labor supply of various subsidy schemes proposed to foster low-wage employment. Using data from the German Socio-Economic Panel, we estimate a discrete choice model of household labor supply. On the basis of the estimated labor supply parameters of husbands and wives, we simulate participation and hours effects of different policies raising low labor earnings at the individual and household levels. In all cases, the labor supply effect is very moderate. Subsidies to individuals promote part-time employment, in particular of second earners, while subsidies based on low household income drive the better qualified partner out of the labor market so that the total number of labor market participants even declines.

Resource author

Hilmar Schneider, Wolfram Kempe, Holger Bonin

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/20950

Resource license

Adapt according to the presented license agreement and reference the original author.